2.01-Understand the impact of the hospitality and tourism destinations on an economy. Ms. Osteen

Economic Conditions Many hospitality businesses rise and fall with the economy. During a recession or contraction, when the economy slows down, the hospitality industry is one of the first to suffer. During an expansion, the economy grows and does well, but hospitality is one of the last industries to benefit.

Economic Conditions Economic conditions greatly influence the demand in the travel and tourism industry. Travel and Tourism goes through economic highs and lows-goes through cycles. When visitors visit hospitality and tourism businesses the local economy thrives.

Economic Conditions Recession- Spending on necessities vs. wants. Examples: Not going to restaurants, attractions and no spending money for vacations. (off-season = higher unemployment) Peak Stage- More $$ to spend on luxurious/desirable items. Examples: Vacations, visiting restaurants or other attractions.

Economic Multiplier Economic multiplier – an effect in economics in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent. Tourism not only creates jobs it also encourages growth in a specific industry. This is known as the multiplier effect which in its simplest form is how many times money spent by a tourist circulates through a country's economy. Example: Tourist spend money at local attractions-employees at the attraction earn money and spend their income on local restaurants and stores.

Supply and Demand Supply - The total amount of a product (good or service) available for purchase at any specified price. Demand - Desire for certain good or service supported by the capacity to purchase it. Example: A band touring in Charlotte will bring the demand for hotel rooms within the city.  

Globalization Globalization- process in which the economies of different nations becomes interrelated. Travel among different countries strengthens national economies. Attracting tourist improve infrastructure. Increase in travel and tourism increases more employee opportunities.

Economic problems in one country can affect others around the world. Globalization Economic problems in one country can affect others around the world. Transnational corporations have offices in countries around the world. Tourism facilities are being developed nationally and internationally.

Transnational Corporation Transnational corporation – corporation that has major operations in several countries. Example: Major hotel chain has 710 hotels in 64 countries.

Trends for the Future Four trends affecting businesses are: demographic trends social trends lifestyle trends technology trends Hospitality professionals stay informed about trends so that they can better serve their customers’ needs and wants.

Demographic Trends Demographics is the study of a population’s characteristics, such as age, income, or ethnic origin Two demographic trends that affect the hospitality industry: more retirees more young people traveling in small groups

A social trend is a change in the structure or beliefs of a society. Social Trends A social trend is a change in the structure or beliefs of a society. Two social trends that affect the hospitality industry: changes in family structure acceptance of gaming

A lifestyle trend is a change in the way people live their lives Lifestyle Trends A lifestyle trend is a change in the way people live their lives Three lifestyle trends that affect the hospitality industry: concern for health impulse buying desire to learn and have new experiences

Two technology trends that affect the hospitality industry: customers’ use of the Internet and mobile computing to obtain information and make reservations businesses’ use of software to manage information about guests, employees, and finances

Tourism helps build infrastructure. Tourists add money to a TDA by buying lodging, food, and other goods and services Tourists benefit their home economy by buying transportation and other goods and services

National Tourism Marketing National tourism offices work to attract international tourists to their country. The amount of money spent in a destination is influenced by the location of the travelers’ country of origin. The U.S. Travel Association (USTA) promotes travel to and within the United States with marketing campaigns such as Brand USA.

Inbound/Outbound Inbound Arriving (such as passengers), or coming in (such as a flow). Return leg of a journey Outbound Leaving (such as passengers), or going out (such as a flow). Departing leg of a journey

Staying only a short time, not permanently. Transient Staying only a short time, not permanently. Guest at a hotel are “transient”